New Rule Requires Small Businesses and LLCs to Report Ownership Information

Business Management
Published

As of Jan. 1, 2024, many businesses will be required to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) to identify those who directly or indirectly own or control the company. This requirement stems from the enactment of the Corporate Transparency Act (CTA) passed with the National Defense Authorization Act for Fiscal Year 2021.

The reporting requirements generally are applicable to small corporations, limited liability companies (LLCs) and other similar entities that:

  • have 20 or fewer full-time employees; and
  • filed federal income taxes in the previous year demonstrating $5 million or less in gross receipts or sales.

There are 23 types of entities that are exempt from reporting beneficial ownership. Those entities include:

  • publicly traded companies meeting specified requirements
  • many nonprofits
  • certain large operating companies

Reporting companies that were created before Jan. 1, 2024 have until Jan. 1, 2025 to file their initial report with FinCEN. Those created in 2024 will have 90 days after receiving notice of their creation or registration to file their initial report. Those created in 2025 will have 30 days to file their report.

The CTA helps the U.S. government identify money laundering, corruption, tax evasion, drug trafficking, fraud and other crimes. Congress passed the CTA to make it harder for these illegal activities and their perpetrators to hide from law enforcement officials.

NAHB Resources and Free Webinar

NAHB has provided answers to frequently asked questions and links to key resources here.

NAHB will also host a free webinar about these new requirements on Wednesday, Jan. 17, at 2 p.m. ET. The webinar will feature David King, a senior regulations advisor at FinCEN, who will provide further details on what business owners need to do to comply.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Labor

May 13, 2025

What Are the Highest Paying Jobs in Construction?

Half of payroll workers in construction earn more than $60,320, compared to the U.S. median annual pay of $49,500, and the top 25% make at least $81,510, according to the latest May 2024 Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) and analysis by NAHB. See which occupations in the construction are the highest earning.

Material Costs

May 12, 2025

Statement from NAHB Chairman Buddy Hughes on U.S.-China Tariff Agreement

Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Lexington, N.C., issued a statement after the U.S. and China announced a 90-day pause on most of the tariffs each nation has imposed on one another.

View all

Latest Economic News

Economics

May 13, 2025

Inflation Eased Again in April

Inflation slowed to a 4-year low in April while shelter inflation remained elevated. Despite the easing, inflation may pick up in the coming months as possible inflationary pressure from enacted tariffs and other policy uncertainties continues to threaten economic growth and complicate the Fed’s path to its 2% target.

Economics

May 13, 2025

Residential Mortgages Experience Weaker Demand in First Quarter

Overall demand for residential mortgages was weaker while lending standards for most types of residential mortgages were essentially unchanged according to the Federal Reserve Board’s April 2025 Senior Loan Officer Opinion Survey (SLOOS).

Economics

May 13, 2025

Highest Paid Occupations in Construction in 2024

Half of payroll workers in construction earn more than $60,320 and the top 25% make at least $81,510, according to the latest May 2024 Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) and analysis by the National Association of Home Builders (NAHB). In comparison, the U.S. median annual pay is $49,500, while the top quartile (the highest paid 25%) makes at least $78,810.